04/19/23 MEDTRONIC CONFIDENTIAL 1

The Medtronic CareLink™ Network

(and Heart Failure Device Patients)

The Medtronic CareLink™ Network

(and Heart Failure Device Patients)

Presented By:

Will Au-Yeung

John Curtis

Susan Malaret

04/19/23 - page 2

Agenda

• Converging Forces

o Increasing Heart Diseaseo Industry & IT Trends

• CareLink Technology

• Reference Case

• Cost Effectiveness Discussion

04/19/23 - page 3

Advancing technology creates opportunity

Increasing Life Expectancy

& Heart Failure

Macro-TrendsIndustry Trends

CareLink

04/19/23 - page 5

What is Heart Failure?

• Heart Failure is NOT a heart attack!

• Heart failure is a condition that develops when the heart’s muscle becomes weakened after it is injured from something like a heart attack or high blood pressure, and loses its ability to pump enough blood to supply the body’s needs.

• Effect on Body

o Not enough blood circulatingo “Congestion” or fluid build up

04/19/23 - page 6

Heart Failure Prevalence

• 4.8 million Americans suffer from congestive heart failure

• 250,000 deaths each year caused by heart failure

• 500,000 new cases diagnosed each year, expected to double within 5 years

• Americans have a 1 in 5 lifetime risk of developing this condition

Source: National Health and Nutrition Examination Survey

04/19/23 - page 7

Heart Failure Occurs in Old Age

0

2

4

6

8

10

12

40-59 60-69 over 70

Percentage of total population by age group

04/19/23 - page 8

Heart Failure Costs

• $40 billion is spent each year in managing heart failure*

• Hospital charges for heart failure management were approximately $10,000 per discharge, based on a mean length of stay of 6.3 to 7.7 days.**

• HF patients average 3.4 office visits per year, at a cost of $13 billion**

• Average cost per office visit- approximately $800/visit.

*Medtronic website**O’Connell, JB, “The Economic Burden of Hearth Failure,” Clinical Cardiology, 2000.

04/19/23 - page 9

Quickly Approaching Capacity Constraints

Implantible cardiac defibrillators (ICDs) are increasingly used for heart failure therapy.

Devic

e pat

ients

Pat

ient

s

0

250

500

750

1000

1250

1500

1998 2000 2002 2004 2006 2008

clinic capacity

The number of cardiac device patients is expected to soon exceed clinics’ capacity

04/19/23 - page 10

Industry Macro-trends

Patients demand:• Greater responsibility for managing their health• Convenient and consistent care delivery• Increased family involvement

Clinics face:• Escalating volumes• Pressures for time, ROI, staff recruitment/retention • Disruption to continuity of care

04/19/23 - page 11

Device Follow-Up: Today

Admin/Technician• Pulls schedule and

patient file

Receptionist• Greets patient• Collects co-pay,

if applicable

Nurse/Technician• Escorts patient to

room• Inquires about meds,

1 2 3

Nurse/Technician• Interrogates device

and checks thresholds when appropriate

4

Doctor • Sees patient if

necessary

5

Receptionist • Schedules next

appointment

6

Nurse/Technician • Completes

paperwork

7

Doctor • Over-reads

paperwork

8

Administration • Billing submitted• Reimbursement

filed9

10-15 mins

Total Time: 20-30 minutes

5 mins5 mins

04/19/23 - page 13

Patient holds the antenna over her device for interrogation. The Monitor automatically dials a toll-free number and transmits the data over a standard phone line.

1

2 Data is automatically sent to a secure server

4Patients and their families can access extensive materials about living with their ICD

3Clinic can view patient data and reports on a secure website

Solution:Medtronic CareLink Network

04/19/23 - page 14

Medtronic CareLink™ Monitor

Portable device used by patients to send data

• Routine follow-up• Symptomatic episodes• Post-shock events

A standard telephone line is the only requirement

• Connect from home or while traveling (within the United States) Medtronic CareLink

Monitor

04/19/23 - page 15

Clinician Website

• Interrogation capabilities comparable to in-office follow-up

• All vital information provided in familiar, easy-to-read format

• Review information any time, anywhere

• Connect using personal computer with standard Internet access

04/19/23 - page 16

Patient list• The first screen

the clinician sees upon entering the CareLink Clinician site

• Allows quick triage of patients, based on alerts

• Detailed information on patients or transmissions is one click away

• Sort by date/time, patient name, and physician

04/19/23 - page 17

• All vital device information provided in a familiar, easy-to-read format

• Comparable to the Medtronic programmer

Quick Look™

04/19/23 - page 18

10 Second EGM

Determine appropriate sensing and pacing characteristics

Patient’s presenting rhythm is captured at time of transmission

04/19/23 - page 19

Cardiac Compass Report

• One of the most important patient monitoring tools

• Same format as the Programmer

• Can be viewed on-screen first and then printed on 8 ½” x 11” paper

04/19/23 - page 20

Workflow with CareLink

3 mins 4 mins

Total Time: 4-8 minutes

Admin/Technician• Pulls patient file• Prints Reports• Schedules next

appointment

1

Nurse/Technician• Checks device and

completes paperwork

2

Doctor • Over-reads

paperwork

3

Administration• Paperwork to Billing• Billing submits claim

4

04/19/23 - page 21

The solution.

Medtronic ICD Follow-up Example

The MedtronicCareLink Solution:• Increases the number of

patients clinics can see today without investing in new staff or facilities

• Limit staff and facility investments tomorrow

Med

tron

ic

Care

Link

ICD Follow-up Clinic Example

04/19/23 - page 22

Cost Effectiveness

04/19/23 - page 23

Cost Effectiveness

(Cost of intervention – costs averted by intervention)

Benefits of intervention

Cost Effectiveness =

04/19/23 - page 24

Cost Effectiveness

Costs of Intervention

By Payor:

• Reimbursed same as office visit

By Provider:

• Medtronic bills monthly fee based on number of patients enrolled (about $17.50 per patient, per month)

• Cost of nurse, technician, and/or physician to review reports

• Some training required

By Patients:

• No fee to Medtronic for monitor or basic patient website access

• Patient co-pays are equivalent to in-office visit

• Some training required

04/19/23 - page 25

Cost Effectiveness

Costs averted by intervention

For clinics:

• Reduced cycle time for follow-up visit- “5 minute check vs. 20 min check.”

By patients:

• Transportation costs and lost time

04/19/23 - page 26

Costs averted include transportation time for patients and reduced cycle time for follow-up checks for clinics.

Admin/Technician• Pulls schedule and

patient file

Receptionist• Greets patient• Collects co-pay,

if applicable

Nurse/Technician• Escorts patient to

room• Inquires about meds,

Nurse/Technician• Interrogates device

and checks thresholds when appropriate

Doctor • Sees patient if

necessary

Receptionist • Schedules next

appointment

Nurse/Technician • Completes

paperwork

Doctor • Over-reads

paperwork

Administration • Billing submitted• Reimbursement

filed

10-15 mins

10 mins

Current Follow-up Work flow:

Total Time: 20-30 minutes

Cost Effectiveness

04/19/23 - page 27

3 mins 4 mins

Total Time: 4-8 minutes

Admin/Technician• Pulls patient file• Prints Reports• Schedules next

appointment

Nurse/Technician• Checks device and

completes paperwork

Doctor • Over-reads

paperwork

Administration• Paperwork to Billing• Billing submits claim

Work flow with CareLink:

Time savings with CareLink: 12-26 minutes

Cost Effectiveness

04/19/23 - page 28

Clinic Benefits:

• Better patient care: Allows continuity of care, which may lead to improved patient compliance and satisfaction.

• Improved access to patient data: Comprehensive device data and patient diagnostics are available when and where needed.

• Improved clinic operations: Current clinic customers report being able to dramatically decrease the time for each device check.

Patient Benefits:

• Convenience: routine device checks can be done from the convenience of the patient’s home.

• Freedom to travel: patients can transmit data from anywhere in the 50 states

• Peace of Mind: patients and their families have peace of mind by being remotely connected to clinics.

Cost Effectiveness

Benefits of Intervention

04/19/23 - page 29

Cost Effectiveness

Net costs of intervention:

• Increased cost to clinic for CareLink service approx. $210 per patient per year. CareLink reader provided to patient free of charge.

• No net change for equipment at clinic.

• Cost savings from decreased cycle time potentially $400 per visit, or $1360 per patient per year based on 3.4 visits per year.

• Net savings potentially $1150 per patient per year.

Change in Quality Adjusted Life Years (QALY’s)

• Undetermined: net change in health status likely to be negligible due to equivalence to office visit.

• Potential gains: decrease in disease affecting work and social activities due to travel time to office visits.

• Potential losses: increased complexity of care.

Total Cost Effectiveness

Potentially cost saving, but more studies need to be completed.

04/19/23 - page 30

Cost Effectiveness

“Preliminary findings suggest that using this technology would result in an annual savings of $515 per patient and a 26% reduction in Medicare costs. Investigators also postulate that if all 500,000 Americans with pacemakers switch to remote monitoring, the technology could save Medicare $210 million a year in direct healthcare costs.”

Quality, Patient Safety & Cost Effectiveness through Leadership and Health Information Technology

“The benefits of eHealth enabled chronic care have been established by leading health care institutions including the Dept. of Veterans Affairs, which recently published results from over 2 years of demonstration projects showing 63% reduction in hospital admissions and a significant improvement in quality of life.

“Published results from studies involving over 1000 patients with HF, diabetes and chronic respiratory disease- showed a 40% reduction in emergency room visits, 63% reduction in hospital admissions, 60% reduction in hospital bed days of care….and significant improvement in quality of life.

Remote monitoring of ICDs July 2003 by National Horizon Scanning Centre.

Cost effectiveness study carried out in France- A follow-up cost for non home monitoring patients was compared to the expected follow-up cost of patients with home monitoring of ICDs. For each visit, the cost for transportation was $128 US and medical costs were $94 leading to a total cost of $222. Over 5 years, the reduction in costs for follow-up visits was estimated at $2,200 if the number of visits is reduced from 4 to 2 and $3,300 if reduced to 1 visit per year.

Healthcare:Harness the Power of the Internet e-Commerce and e-Care by Douglas E. Goldstein, Aspen Publishers

Effectiveness of Similar Technologies

04/19/23 - page 31

Reimbursement - Existing Codes

• CMS Carrier (WPS) Medical Director has agreed to allow use of existing codes

• Use codeso 93741

• Single-chamber ICD check without reprogramming

o 93743• Dual-chamber ICD check without reprogramming

• No additional paperwork require

• Approximate Medicare reimbursement in Chicago/Illinois = $75 - $85

04/19/23 - page 32

Reimbursement

04/19/23 - page 33

Conclusions

• Cost effectiveness of telemedicine is hard to prove o Claims data is minimally useful

• Uses current codes- difficult to differentiate from reference case

• Patients are sick! A lot of comorbidities.

• Cost-savings for provider is not clear o Time savings? Prevention of hospitalization and follow-ups?

• Patient Benefit is Unclearo Convenient but does it impact the QOL score?

• Further Studyo Clinical studies to identify any changes in QALYso Verification of decreases in cycle time and associated costs.

04/19/23 - page 34

Questions?

04/19/23 - page 35

The Future of Follow-Up Care

• Cardiac patients send comprehensive device data from the comfort of their homes.

• Electrophysiologists view and analyze data using the Internet.

• Patients may view an educational website designed exclusively for them.

• Referral physicians benefit from timely feedback from the EP about the patient’s condition.

04/19/23 - page 36

The Numbers…

0

200

400

600

800

1000

VT/VF* Post-MI, LowEF**

Wide QRSICD***

Pat

ient

Pre

vale

nce

(000

’s)

Only 34% of VT/VF patients indicated for ICD therapy receive the device today*

*Ruskin, N. J Cardiovascular Electrophysiology, 2002;13:38-43.**1) AHA 2002 Heart and Stroke Statistical Update. Dallas, Tex.: AHA 2001. 2) Brehens, S. PACE. 2002;25:545. 3) Reek S et al. PACE. 2002;24:527. *** Abraham W, Fisher W, Smith A, et al. N Engl J Med. 2002;346:1845-1853.

04/19/23 - page 37

A growing population

The number of patients indicated for ICD therapy has doubled.*

Fact:Dev

ice

patie

nts

Pat

ient

s

0

250

500

750

1000

1250

1500

1998 2000 2002 2004 2006 2008

clinic capacity

The number of cardiac device patients is expected to soon exceed clinics’ capacity

ICD Follow-up Clinic Example

* ACC/AHA/NASPE 2002 guideline update.

04/19/23 MEDTRONIC CONFIDENTIAL 38

Impact to Your ClinicImpact to Your Clinic

04/19/23 MEDTRONIC CONFIDENTIAL 39

Patient AdoptionPatient Adoption

04/19/23 - page 40

Patient benefits

Routine device checks can be done from the convenience of the patient’s home.

Patients can transmit data when they travel within all 50 states (USA only).

Patients and their families have peace of mind by being remotely connected to the clinic.

Convenience:

Freedom to travel:

Peace of mind:

04/19/23 MEDTRONIC CONFIDENTIAL 41

ReimbursementReimbursement

04/19/23 - page 42

NASPE Consensus and Guidelinesfor Regular ICD Evaluations

• One-to-four month intervals

• More frequently if

o ICD therapy occurs in absence of premonitory symptoms

• To ensure no false sensing or breach of electrode integrity has occurred

• As battery end-of-life approaches

04/19/23 MEDTRONIC CONFIDENTIAL 43

Pricing and BillingPricing and Billing

04/19/23 - page 44

Pricing

• For clinicso Monthly fee based on number of patients enrolled (~$17.50

pppm)o No up-front fees; 30-day notice to terminateo Invoiced per patient per quartero SignUp! Program applies with 10 or more patients per quarter

• For patientso No fee to Medtronic for monitor or basic patient website

access • Patient co-pays equivalent to in-office visit

04/19/23 - page 45

Clinic Fee Supports Many Services

• Clinician Website

• Monitor (shipping, storage, and replacement)

• System Maintenance

• System Updates

• Data Storage

• Security

• Unlimited Clinic Users

• Implementation Support (including materials, training, etc.)

• Technical Support

• Account Management

04/19/23 - page 46

Sign up. Enroll patients. Save.

• Enroll 10 or more patients on the Medtronic CareLink Network in a calendar quarter and receive a rebate---resulting in savings of approximately 25%

• Introducing…

04/19/23 - page 47

CareLink Network Economic Advantages

• Snowbirds

• Episode Patients who go to the ER

• Referrals and Outreach

• Marketing Leadership

• Time – Reallocate to Higher Value Activities

• Potential Savings in Satellite Expenses

04/19/23 - page 48

Why clinics buy CareLink:

• Low Risk Business Model and Contracto No upfront costs – unlimited users – complete serviceo Upgradeable to new technologyo 30 day anytime out of the contracto Maintain current reimbursement

• CareLink is cash flow neutral• Not a cherished revenue/profit center (non-material)

• Perceived Value of Technologyo Technology is a new option to manage clinic growtho CL competes well with current cost of running a clinico Improve workflow – “The 5 minute Check vs. the 20 minute check”.o “Patients are asking for CareLink”.

04/19/23 MEDTRONIC CONFIDENTIAL 49

Implementation and Account ManagementImplementation and

Account Management

04/19/23 - page 50

Medtronic Patient Management Provides Comprehensive Account Management

• Implementation and Ongoing Service

• Partner with Customer to Achieve CareLink Objectives

o Best Practice Development and Sharing

• Respond to Service Requests and Information Needs

• Represent Customer in Product Enhancement Planning

“Our Goal: Customer Satisfaction and Retention”

04/19/23 - page 51

Medtronic CareLink Network

Questions????

04/19/23 - page 52